The Hindu Business Line : IDBI Bank up on merger ratio hopes

Dealers said the rise in the stock price is ahead of the merger ratio announcement with IDBI. The talk is that the ratio is likely to be announced soon. The expectation is the merger ratio is likely to be in favour of IDBI Bank shareholders.

Earlier, the expectation was that the ratio would favour IDBI. At that time, the talk was that the ratio would be two shares of IDBI Bank for every share of IDBI. And the stock price of IDBI moved much faster than that of IDBI Bank.

But now the expectation is that merger ratio would be lower which could be in the range of 1-1.5 shares of IDBI Bank for every shares of IDBI. Dealers said the fall in the stock price of IDBI now is due to the likely announcement of the merger ratio shortly.

On Tuesday, the stock price of IDBI Bank gained 9.98 per cent at Rs 78.25 on the BSE with volumes of 33.89 lakh shares; on the NSE, it closed at Rs 78.55, up 10.32 per cent, with volumes of 76.60 lakh shares.

On the other hand, the IDBI stock fell 1.28 per cent at Rs 111.55 on the BSE with volumes of 7.65 lakh shares; on the NSE, it closed at Rs 111.50, down 1.37 per cent, with volumes of 18.35 lakh shares.

Cement shares gain on price rise talk

CEMENT companies shares, across the board, saw active buying on Tuesday. The buying was on expectation of rise in cement prices in various parts of the country.

The talk is that the rise in cement prices are expected around Rs 20-25 per 50 kg bag this month. In the last few months, cement prices rose Rs 15-20 per bag.

The talk is that the increased demand for cement from construction sector has led the cement companies to increase the price.

Another reason is several foreign broking firms are advising their FIIs' clients to buy cement companies' stocks which have domestic focus and are unlikely to be affected by international developments.

Among the gainers were ACC (up 2.94 per cent at Rs 351.55 on the BSE), Birla Corp (up 3.39 per cent at Rs 157.20), Gujarat Ambuja Cement (up 4.48 per cent at Rs 425.85), India Cement (up 5.86 per cent at Rs 62.35), Mangalam Cement (up 9.97 per cent at Rs 66.75) and Ultratech Cement (up 1.46 per cent at Rs 343.75).

Virendra Verma

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